Accounting for equity investments
Learning Objective 3, 4
Strategic Investments completed the following investment transactions during 2018:
Jan. 14 Purchased 800 shares of Phyflexon stock, paying $50 per share. The Investment represents 4% ownership in Phyflexon's voting stock. Strategic does not have significant influence over Phyflexon. Strategic intends to hold the investment for the indefinite future.
Aug. 22 Received a cash dividend of $0.24 per share on the Phyflexon stock.
Dec. 31 Adjusted the Investment to its current market Value of 545 per share.
31 Phyflexon reported net income of 5330,000 for the year ended 2018.
Requirements
- Journalize Strategic's investment transactions. Explanations are not required.
- Classify and prepare a partial
balance sheet for Strategic's Phyflexon investment as of December 31, 2018. - Prepare a partial income statement for Strategic Investments for year ended December 31, 2018.
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